830 CMR 119A.6.1

830 CMR 119A.6.1: Assessment of Interest and Penalties on Past-Due Child Support

830 CMR 119A.6.1 is hereby repealed and replaced with the following:

Statement of Purpose, Effective Date, Outline.

Statement of Purpose. M.G.L. c. 119A, § 6(a) authorizes the Child Support Enforcement Division of the Massachusetts Department of Revenue (DOR) to assess interest and penalties on past-due child support owed by obligors. The purpose of 830 CMR 119A.6.1 is to implement M.G.L. c. 119A, § 6(a).

Effective Date. 830 CMR 119A.6.1 will take effect on July 1, 2010.

Outline. 830 CMR 119A.6.1 is organized as follows:

Statement of Purpose, Effective Date, Outline.

Definitions.

Computation of Interest.

Computation of Penalties.

Assessment of Interest and Penalties.

Notice to Obligor.

Distribution of Partial Payments, Interest and Penalties.

Enforcement of Interest and Penalties.

Previously Accrued Interest and Penalties.

Waiver of Interest and Penalties Owed to the Commonwealth.

Definitions. For purposes of 830 CMR 119A.6.1, the following terms have the following meanings:

Assessment Date, the last day of each month, the date on which interest and penalties are assessed.

Child Support Enforcement Division of the Department of Revenue (DOR), the single state agency for the Commonwealth responsible for establishing parentage and establishing, modifying and enforcing child support orders pursuant to Title IV, Part D of the Social Security Act, 42 U.S.C. § 651 et seq., and M.G.L. c. 119A. The Child Support Enforcement Division is a division contained within the Department of Revenue.

Commissioner, the Commissioner of Revenue or the Commissioner's duly authorized representative.

Interest, a monthly charge authorized by M.G.L. c. 119A, § 6, for failing to pay an amount of child support due as of the Assessment Date, to be paid to an obligee.

Most Recent Monthly Obligation, the total amount of current child support owed by an obligor during the current month or, in cases in which there is no longer a current child support order, but the obligor owes past-due child support, an amount equal to 100% of the monthly amount of the obligor's last current child support obligation, the monthly amount of any income levy issued by DOR, or, if DOR has not issued an income levy, the monthly amount billed by DOR.

Obligee, an individual to whom support is owed or in whose favor a support order has been issued or the Commonwealth if there is an assignment of child support rights pursuant to Title IV, Parts A and E, or Title XIX of the Social Security Act. See M.G.L. c. 119A, § 2.

Obligor, an individual, or the estate of a decedent, who owes a duty of support, or who is liable under a child support order. See M.G.L. c. 119A, § 2.

Past-due Child Support, the principal amount of child support, including medical support, which is due under a child support order or family support order issued by a court of the Commonwealth and which is unpaid as of the date on which it was due, whether the amount due is a fixed sum or is accruing periodically, including any amount of restitution ordered by a court or an administrative agency of competent jurisdiction. See M.G.L. c. 119A, § 6(b)(1).

Penalties, a monthly charge authorized by M.G.L. c. 119A, § 6, for failing to pay an amount of child support due as of the Assessment Date.

Computation of Interest. Interest on past-due child support will be assessed at a monthly rate of .5%. Interest will be computed on the total past-due child support owed on the Assessment Date. In the event that DOR makes an adjustment of the total past-due child support owed after the Assessment Date, DOR will reassess the interest based on the adjustment in the amount of past-due child support owed. Interest will apply to all past-due child support owed on July 1, 2010, and to all past-due child support which accrues from July 1, 2010, forward, including all restitution from the date established or July 1, 2010, whichever is later. Interest will not be assessed on interest or penalties.

Computation of Penalties. Penalties on past-due child support will be assessed at a monthly rate of .5%. Penalties will be computed on the total past-due child support owed on the Assessment Date. In the event that DOR makes an adjustment of the total past-due child support owed after the Assessment Date, DOR will reassess the penalties based on the adjustment in the amount of past-due child support owed. Penalties will apply to all past-due child support owed on July 1, 2010, and to all past-due child support which accrues from July 1, 2010 forward, including all restitution from the date established or July 1, 2010, whichever is later. Penalties will not be assessed on interest or penalties.

Assessment of Interest and Penalties.

Monthly Assessment of Interest and Penalties. Interest and penalties will be assessed monthly pursuant to 830 CMR 119A.6.1(3) and (4) if, on the Assessment Date, the past-due child support amount exceeds $500, unless the obligor satisfies one of the exclusion criteria set forth in 830 CMR 119A.6.1(5)(b) or one of the exemption criteria set forth in 830 CMR 119A.6.1 (5)(c).

Exclusion from Monthly Assessment of Interest and Penalties. If the amount of past-due child support exceeds $500 as stated under 830 CMR 119A.6.1(5)(a), DOR will not assess interest and penalties for the month ending on the Assessment Date if the obligor has made support payments during the month that equal the most recent monthly obligation as defined in 830 CMR 119A.6.1 (2).

Exemption from Assessment of Interest and Penalties. The obligor may be eligible for an exemption from the assessment of interest and penalties if he satisfactorily documents the existence of one of the following criteria and does not otherwise have the financial ability to pay the child support. The determination as to what constitutes satisfactory documentation is in DOR's sole discretion.

1. The obligor is receiving cash benefits from a needs-based program, including, but not limited to, Supplemental Security Income (SSI), Transitional Assistance to Needy Families (TANF), and State Veterans' benefits.

2. The unemancipated child for whom support is owed is living with the obligor, either because the obligor has physical custody of the child or because the obligor and obligee are cohabiting, and the current support order has been terminated.

3. The obligor has been temporarily unable to meet his support obligation due to loss of employment, provided:

a. the obligor is actively seeking employment; or

b. a workers' compensation insurer, the Department of Unemployment Assistance (DUA) or another state's unemployment agency is remitting child support to DOR on behalf of the obligor, but the amount of the withholding is insufficient to satisfy the total monthly obligation.

4. The obligor has a medically verified disability that affects earning capacity and does not otherwise have the financial ability to meet the support obligation. An obligor may be eligible for the exemption if child support is being withheld from SSDI, veterans' benefits or other disability benefits and remitted to DOR, but the amount of the withholding is insufficient to satisfy the total monthly obligation in full.

5. The obligor has been institutionalized in a psychiatric facility, hospice, long term care facility, nursing home, rehabilitation facility or other similar facility and has no financial ability to pay child support.

6. The obligor has been incarcerated but is participating in or has successfully completed a counseling, job training or self-improvement program approved by DOR.

7. The obligor has obtained a reduction, termination or suspension of the current support obligation after filing a modification complaint in the appropriate probate and family court, provided that the exemption is not available if the reduction, termination or suspension of the current support obligation arose in the context of a contempt action. The exemption will be retroactive only to the date of filing of the modification complaint.

8. The obligor is on active duty in the United States Armed Forces and is paying child support by income withholding, but the amount of withholding is insufficient to satisfy the total monthly obligation in full.

9. The obligor has been approved for a hardship exemption by DOR.

For purposes of 830 CMR 119A.6.1(5)(c), a person is deemed to have the financial ability to pay the support obligation if he receives unemployment compensation benefits, workers' compensation benefits, Social Security Disability Insurance (SSDI), federal veterans' disability benefits or benefits under a disability policy of insurance.

(d) Conditions for Exemption from Assessment of Interest and Penalties. It shall be the responsibility of the obligor to notify DOR of the existence of any of the exemption criteria set forth in 830 CMR 119A.6.1(5)(c). The exemption from assessment of interest and penalties will apply only for as long as the obligor meets one of the criteria set forth in 830 CMR 119A.6.1(5)(c). The obligor is not entitled to receive an exemption from the assessment of any interest and penalties once DOR has collected the assessed interest or penalties.

(6) Notice to Obligor. DOR will notify the obligor of the interest and penalties owed on past-due child support at least once annually.

(7) Distribution of Partial Payments, Interest and Penalties.

(a) Distribution of Partial Payments. Any payments DOR receives in excess of both current and past-due support owed will be applied to interest first and then to penalties that have accrued.

(b) Distribution of Interest.

1. If an obligor owes interest for more than one family, DOR will distribute interest collected pro rata, based on the amount of interest owed for each family, including interest assessed on past-due child support owed to the Commonwealth as a result of an assignment of child support rights pursuant to Title IV, Parts A and E, or Title XIX of the Social Security Act.

2. If an obligor owes interest to both a family and the Commonwealth as a result of an assignment of child support rights pursuant to Title IV, Parts A and E, or Title XIX of the Social Security Act, DOR will distribute interest collected to the family first, provided that the family is not receiving public assistance. If the family is receiving public assistance, DOR will distribute interest collected to the Commonwealth first, and then to the family.

(c) Distribution of Penalties. DOR will retain penalties collected and will deposit such penalties into the Child Support Trust Fund. See M.G.L. c. 119A, §§ 2 and 9.

(8) Enforcement of Interest and Penalties. Interest shall be considered child support and shall be collected and enforced by any means authorized under M.G.L. c. 119A for the enforcement and collection of child support. Penalties shall be collected and enforced by any means authorized under M.G.L. c. 119A for the enforcement and collection of child support.

(9) Previously Accrued Interest and Penalties. Any interest and penalties which were assessed before the Effective Date provided by 830 CMR 119A.6.1(1) will not be affected by the provisions of 830 CMR 119A.6.1.

(10) Waiver of Interest and Penalties Owed to the Commonwealth. The Commissioner may waive all or a portion of the interest and penalties owed to the Commonwealth if the Commissioner determines such waiver is in the best interest of the Commonwealth and will maximize collection of current child support and past-due support owed to individual obligees and to the Commonwealth as a result of an assignment of child support rights pursuant to Title IV, Parts A and E, or Title XIX of the Social Security Act.

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